2016 Pacific Crest Securities Private SaaS …...2 Pacific Crest 2016 Private SaaS Company Survey...

2016

Pacific Crest

Private SaaS

Company

Survey

Results

October 17, 2016

2

Pacific Crest 2016 Private SaaS Company Survey

• This report provides an analysis of the results of a survey of private SaaS companies

which Pacific Crest’s software investment banking team conducted in June-July 2016

– Represents the seventh such survey Pacific Crest has completed

– The survey results include responses from senior executives of 336 companies

– Special thanks to our partners at Matrix Partners and the forEntrepreneurs blog for help

soliciting participants and republishing our report

• Representative statistics on the survey participants:

– ~$5MM median 2015 revenues, with over 60 companies >$25MM

– Median employees (FTEs): ~50

– Median customer count: ~250; 28% with >1,000 customers

– 75% headquartered in the U.S.

– ~$25K median annual contract value (ACV)

– 44% use field sales as predominant mode of distribution; 23% inside sales

Our goal is to provide useful operational and financial benchmarking

data to executives and investors in SaaS companies

3

Survey Participant Geography (HQ)

5

9 8

251

36

2

23

U.S. Regions

Northern California / Silicon Valley 53

Midwest / Chicago 36

Southeast U.S. 29

Boston / New England 27

Mid-Atlantic / DC 21

Texas 18

Colorado / Utah 14

Pacific Northwest 14

New York Metropolitan Area 13

Southern California 13

Other U.S. 13

TOTAL U.S. : 251

Other Locations

Europe 36

Canada 23

Australia / New Zealand 9

Latin America 8

Asia 5

Middle East / Africa 2

TOTAL Non-U.S. : 83

* 2 companies did not indicate HQ

TOTAL: 336*

4

70

3430

3429

2621

3540

15

0

10

20

30

40

50

60

70

80

<15 15 - 25 25 - 35 35 - 50 50 - 75 75 - 100 100 - 150 150 - 250 250 - 500 >500

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Full-Time Equivalent Employees

Survey Participant Size Distribution

334 respondents

Median ≈ $5MM

Median ≈ 50

Revenue

FTEs

72

5450

26

2016

34

19 17

811

7

0

10

20

30

40

50

60

70

80

<$750K $750K-$2.5MM

$2.5MM-$5MM

$5MM-$7.5MM

$7.5MM-$10MM

$10MM-$15MM

$15MM-$25MM

$25MM-$40MM

$40MM-$60MM

$60MM-$75MM

$75MM-$100MM

>$100MM

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2015 Revenue

5

$44K

$94K

$113K $109K $111K

$133K

$163K $167K

$185K

$161K

$214K

$0K

$50K

$100K

$150K

$200K

$250K

<$2.5MM $2.5MM-$5MM

$5MM-$7.5MM

$7.5MM-$10MM

$10MM-$15MM

$15MM-$25MM

$25MM-$40MM

$40MM-$60MM

$60MM-$75MM

$75MM-$100MM

>$100MM

Me

dia

n 2

01

5 G

AA

P R

ev

en

ue

pe

r F

TE

2015 GAAP Revenue

Revenue per FTE Efficiency

Respondents: Total: 330, <$2.5MM: 124, $2.5MM-$5MM: 50, $5MM-$7.5MM: 26, $7.5MM-$10MM: 20, $10MM-$15MM: 16, $15MM-$25MM:

34, $25MM-$40MM: 19, $40MM-$60MM: 15, $60MM-$75MM: 8, $75MM-$100MM: 11, >$100MM: 7

Respondents (Excluding Companies <$2.5MM in Revenue): 206

Median ≈ $96K

Median ≈ $130K (Excl. companies

<$2.5MM in revenue)

Comparison with

Previous Surveys

Somewhat lower than last

year’s overall median of

~$112K and a median of

$142K for companies

>$2.5MM in revenue

6

GROWTH RATES

7

How Fast Did / Will You Grow GAAP Revenues? (Including All Respondents)

326 and 320 respondents, respectively

Median 2015 GAAP Rev Growth ≈ 44%

Median 2016E GAAP Rev Growth ≈ 48%

Comparison with

Previous Surveys

Largely consistent with

last year’s results

The median

revenue growth

achieved by

survey

respondents in

2015 was 44%,

while the median

projected growth

for 2016 is 48%.

10

14 13

24 23

28

22

18

25

17

30

23

79

3

12 11

2422

25 25

21 2124 24

19

89

0

10

20

30

40

50

60

70

80

90

100

<0% 0-10% 10-15% 15-20% 20-25% 25-30% 30-35% 35-40% 40-50% 50-60% 60-80% 80-100% >100%

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2015 GAAP Revenue Growth 2016E GAAP Revenue Growth

8

How Fast Did / Will You Grow GAAP Revenues? (Excluding Companies <$2.5MM in Revenue)


As expected,

many of the

fastest growers

are among the

smallest

companies.

Eliminating them

brings median

growth rates

down ~10%

points.

Median 2015 GAAP Rev Growth ≈ 35%

Median 2016E GAAP Rev Growth ≈ 36%

Comparison with

Previous Surveys

Medians consistent with

last year’s results, though

this year’s respondent

pool was more evenly

distributed

3

11 11

16

20

25

1514

19

10

24

10

26

2

8

10

21

18

2019

1615

16

21

7

28

0

5

10

15

20

25

30

<0% 0-10% 10-15% 15-20% 20-25% 25-30% 30-35% 35-40% 40-50% 50-60% 60-80% 80-100% >100%

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2015 GAAP Revenue Growth 2016E GAAP Revenue Growth

9

45%

35%

65%63%

25%

29%

34%

25%

29%28%

0%

10%

20%

30%

40%

50%

60%

70%

$2.5MM-$5MM

$5MM-$7.5MM

$7.5MM-$10MM

$10MM-$15MM

$15MM-$25MM

$25MM-$40MM

$40MM-$60MM

$60MM-$75MM

$75MM-$100MM

>$100M

2015 R

ev

en

ue G

row

th R

ate

2015 GAAP Revenue

Median Growth Rate as a Function of Size of Company (Excluding Companies <$2.5MM in Revenue)

Respondents: Total: 203, $2.5MM-$5MM: 49, $5MM-$7.5MM: 26, $7.5MM-$10MM: 19, $10MM-$15MM: 15, $15MM-$25MM: 34, $25MM-

$40MM: 17, $40MM-$60MM: 17, $60MM-$75MM: 8, $75MM-$100MM: 11, >$100MM: 7

Median

≈ 35%

The results indicate

that companies in the

$7.5MM-$15MM

range are among the

fastest growers –

with the median

growth in this range

much greater than

the median of

companies half their

size.

Comparison with

Previous Surveys

We saw a similar

phenomenon of a bump-

up last year, but for

companies between

$5MM-$7.5MM

10

31%28%

41%

49%

21%25% 26%

19%

26%

18%

70%

56%

99%

76%

36%39%

43%

32%36%

58%

0%

20%

40%

60%

80%

100%

120%

$2.5MM-$5MM

$5MM-$7.5MM

$7.5MM-$10MM

$10MM-$15MM

$15MM-$25MM

$25MM-$40MM

$40MM-$60MM

$60MM-$75MM

$75MM-$100MM

>$100MM

2015 R

ev

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row

th R

ate

2015 GAAP Revenue

Median Growth Rate as a Function of Size of Company

– Middle Third Group (Excluding Companies <$2.5MM in Revenue)

Highlighted range represents the 33rd-67th percentile of data


$40MM: 17, $40MM-$60MM: 17, $60MM-$75MM: 8, $75MM-$100MM: 11, >$100MM: 7

Median

≈ 35%

Looking at the

middle third of

respondents in

each size group

suggests that in

addition to

companies in the

$7.5MM-$15MM

range, smaller

companies are

also among the

fastest growers.

11

Median Growth Rate as a Function of Contract Size (Excluding Companies <$2.5MM in Revenue)

(1) Annual Contract Value (ACV): annualized monthly run rate in recurring SaaS revenues, excluding professional services, perpetual licenses

and related maintenance

Respondents: Total: 163, <$1K: 6, $1K-$5K: 18, $5K-$15K: 27, $15K-$25K: 20, $25K-$50K: 25, $50K-$100K: 32, $100K-$250K: 20, >$250K: 15

Median

≈ 35%

There appears to be

no relationship

between median

contract size and

growth other than a

bump-up for the <$1K

and $15K-$25K

groups (though this

could be skewed by

sparse data in those

groups).

Comparison with

Previous Surveys

Last year, the bump-up

occurred for companies in

the ranges encompassing

$100K-$250K ACV

12

31%

38%

45%

38%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Field Sales Inside Sales Internet Sales Mixed/Other

20

15

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Primary Mode of Distribution(2)

Median Growth Rate as a Function of Sales Strategy (Excluding Companies <$2.5MM in Revenue)

(1) Discrepancy from 35% median on slide 8; smaller set of respondents answered both questions

(2) Primary Mode of Distribution – At least 25% of new ACV bookings from new customers in 2015 come from designated distribution channel

with no other channel exceeding 25%; “Mixed” defined as respondents who have more than 25% of bookings in two or more distribution channels

Respondents: Total: 182, Field Sales: 81, Inside Sales: 42, Internet Sales: 9, Mixed/Other: 50

Median

≈ 36%(1)

We found that median

growth among field

sales-dominated

companies lagged

inside sales-dominated

companies (by 7%

points). (Internet sales

driven business data is

too sparse to draw

conclusions).

Comparison with Previous

Surveys

The field vs. inside sales

comparison mirrored 2015

results

13

35%

39%

34% 34%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

VSB SMB Enterprise Mixed

2015 R

ev

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row

th

Median Growth Rate as a Function of Target Customer(1)

(Excluding Companies <$2.5MM in Revenue)

(1) Target Customer – At least 25% of revenues come from designated customer base; “Mixed” defined as respondents who didn’t select at

least 25% for any designated customer base


VSB customers defined as <20 employees, SMB as ~100-1,000 employees, and Enterprise as >1,000

Respondents: Total: 195, VSB: 14, SMB: 42, Enterprise: 64, Mixed: 75

For companies

>$2.5MM in

revenues, target

customer size

was not a major

indicator of

growth, though

companies

targeting SMBs

reported

modestly higher

revenue growth.

Comparison with

Previous Surveys

A big change for the

“mixed” group. Last year’s

survey showed a distinct

advantage for mixed /

balanced target customer

companies. However, this

year’s results were in-line

with the survey’s historical

norms

Median

≈ 36%(2)

14

26%

32%

30%

33%

38%

35%

48%

50%

45%

50%

-5%

5%

15%

25%

35%

45%

55%

<10% 10-15% 15-20% 20-25% 25-30% 30-40% 40-50% 50-60% 60-80% >80%

Me

dia

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01

5 S

ale

s &

Ma

rketi

ng

Sp

en

d a

s %

of

Re

ve

nu

e

2015 Revenue Growth Rate

Sales & Marketing Spend vs. Growth Rate (Excluding Companies <$2.5MM in Revenue)

Not surprisingly,

companies that

spend more on

sales & marketing

(as a % of revenue)

generally grew at a

faster rate than

those that spend

less. Median

≈ 35%

Comparison with

Previous Surveys

In line with last year’s

survey results

Respondents: Total: 165, <10%: 12, 10-15%: 7, 15-20%: 13, 20-25%: 13, 25-30%: 21, 30-40%: 28, 40-50%: 13, 50-60%: 7,

60-80%: 19, >80%: 32

15

GO-TO-MARKET

16

Primary Mode of Distribution(1)

(1) Mixed / Other defined as respondents who have more than 25% of bookings in two or more distribution channels or channel sales as a

primary mode of distribution


Smaller Companies <$2.5MM in Revenue

Larger Companies $2.5MM+ in Revenue

While field sales

remains the most

popular way to

sell for

companies

>$2.5MM

revenue,

companies with

<$2.5MM

revenue tended

to use inside

sales as their

primary mode of

distribution.

Comparison with

Previous Surveys

Companies $2.5MM+

have shifted to greater

use of field sales (+12%

points from 2015)

Field Sales29%

Inside Sales37%

Internet Sales11%

Mixed/Other23%

Field Sales44%

Inside Sales23%

Internet Sales5%

Mixed/Other28%

17

Primary Mode of Distribution as a Function of Median

Initial Contract Size

Note: Initial ACV of a contract

Respondents: Total: 248, <$1K: 24, $1K-$5K: 30, $5K-$15K: 40, $15K-$25K: 35, $25K-$50K: 46, $50K-$100K: 31, $100K-$250K: 29, >$250K: 13

Comparison with

Previous Surveys

More confidence in inside

sales in the $1K-$25K

range

Analyzed by

contract value,

field sales

dominates for

companies with

median deals

over $25K. Inside

sales strategies

are most popular

for companies

with $1K-$25K

median deal

sizes.

17%

28%23%

52%

68%72%

85%

25%

40%

40% 49%

22%

13%7%

38%

7%

5%

2%

38% 37%

28% 29%24%

19% 21%15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<$1K $1K-$5K $5K-$15K $15K-$25K $25K-$50K $50K-$100K $100K-$250K >$250K

Median Contract Size (ACV)


18

Distribution Strategy – Analysis of Field vs. Inside

Sales in Key Crossover Deal Size Tiers (Excluding Companies <$2.5MM in Revenue)

(1) See definitions described later in this presentation

Respondents (Field-Dominated / Inside-Dominated): 2015 Revenue: 23 and 23, Growth Rate: 23 and 22, Revenue per FTE: 23 and 23, Annual

Gross Dollar Churn: 22 and 22, Net Dollar Retention Rate: 23 and 21, respectively

Among companies

selling $5K-$50K

average ACV, we

compared those

favoring field vs.

inside and found:

(1) larger

companies tended

to favor field; (2)

field sales driven

companies had

lower churn and

higher net dollar

retention rates.

$5K-$50K Median Annual Contract Size

Field-Dominated Inside-Dominated

Median

2015 Revenue $13MM $5MM

Revenue Growth Rate 36% 33%

Revenue per FTE $117K $107K

Annual Gross Dollar Churn(1)8% 13%

Net Dollar Retention Rate(1)104% 100%

19

13

13

19

27

30

29

18

16

9

0 5 10 15 20 25 30 35

<$0.25

$0.25-$0.50

$0.50-$0.75

$0.75-$1.00

$1.00-$1.25

$1.25-$1.50

$1.50-$2.00

$2.00-$3.00

>$3.00

CAC Ratio(1): How Much Do You Spend for $1 of New

ACV from a New Customer? (Excluding Companies <$2.5MM in Revenues)

“How much do you spend on a fully-loaded sales & marketing cost basis to acquire $1 of

new ACV from a new customer?”

Median ≈ $1.13

(1) CAC Ratio: Includes the fully-loaded amount spent on sales & marketing for the win, over multiple periods, if necessary

174 respondents

Respondents

(excluding the

smallest

companies)

spent a median

of $1.13 to

acquire each

dollar of new

ACV from a new

customer. The

result drops to

$1.00 if we

include

companies with

<$2.5MM in

revenues.

Comparison with

Previous Surveys

Similar to last year’s

results of $1.18

20

$0.73

$0.12$0.09 $0.05

$1.50

$0.74

$0.51

$0.32

$1.13

$0.27

$0.20

$0.13

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

New ACV from NewCustomer

Upsells to ExistingCustomer

Expansions Renewals

CAC Ratio on New Customers vs. Upsells vs.

Expansions vs. Renewals (Excluding Companies <$2.5MM in Revenues)

Respondents: New ACV from New Customer: 174, Upsells to Existing Customer: 127, Expansions: 131, Renewals: 137

The median CAC

ratio per $1 of

upsells is $0.27,

or 24% of the

CAC to acquire

each new

customer dollar.

The CAC ratio

number for

expansions is

$0.20, or 18% of

the CAC to

acquire each

new customer

dollar, and for

renewals, it is

$0.13, or 12%.

Comparison with

Previous Surveys

Substantially similar

results to previous years

25th

percentile

75th

percentile

Median

21

$0.98

$1.08 $1.06 $1.13

$1.25

$1.38

$1.29

$-

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$2.5MM to$5MM

$5MM to$7.5MM

$7.5MM to$15MM

$15MM to$25MM

$25MM to$40MM

$40MM to$75MM

>$75MM

Med

ian

Rati

o f

or

New

AC

V f

rom

New

Cu

sto

mers

2015 GAAP Revenue


$75MM: 22, >$75MM: 15

CAC Ratio on New Customers as a Function of Size of

Company (Excluding Companies <$2.5MM in Revenues)

Larger

companies

tended to report

increasing CAC

ratios for new

ACV from new

customers. Median

≈ $1.13

22

CAC Ratio Spend by Primary Mode of Distribution (Excluding Companies <$2.5MM in Revenues)

(1) Results may be skewed by small respondent sample size

(2) Mixed / Other defined as respondents who have more than 25% of bookings in two or more distribution channels or channel sales as a

primary mode of distribution


Other than

Internet, where

CAC appears

significantly

lower (but data is

sparse), there is

no significant

correlation

between go-to-

market approach

and median CAC

– nor is there a

meaningful

difference

between the

distribution of

responses.

Median ≈ $0.38 Median ≈ $1.17 Median ≈ $1.14 Median ≈ $1.11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


< $0.25 $0.25-$0.50 $0.50-$0.75 $0.75-$1.00 $1.00-$1.25

$1.25-$1.50 $1.50-$2.00 $2.00-$3.00 > $3.00

23

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Large Enterprises SMB / Middle Market Very Small Businesses Mixed / Other(1) (2)

CAC Ratio Spend as a Function of Target Customer (Excluding Companies <$2.5MM in Revenues)

(1) Results may be skewed by small respondent sample size

(2) Mixed / Other defined as respondents who have more than 25% of revenue in two or more target customer segments (including

consumer)

Respondents: Total: 167, Enterprise: 56, SMB: 37, VSB: 8, Mixed: 66

Not surprisingly,

the median CAC

ratio for

companies

targeting larger

enterprises is

higher than that

for those

targeting VSB,

SMB and middle

market

companies.

Median ≈ $1.08 Median ≈ $1.00 Median ≈ $1.25 Median ≈ $1.10

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


< $0.25 $0.25-$0.50 $0.50-$0.75 $0.75-$1.00 $1.00-$1.25

$1.25-$1.50 $1.50-$2.00 $2.00-$3.00 > $3.00

24

CAC Composition: Sales vs. Marketing Cost % of CAC

Overall, the

median company

devotes 30% of

their CAC to

marketing

expenses, with

the remainder

allocated to

sales. However,

Internet sales-

driven

companies have

a much greater

reliance on

marketing, with

65% of the

median

company’s CAC

budget devoted

to marketing.

Respondents: Overall: 238, Field Sales: 100, Inside Sales: 63, Internet Sales: 12, Mixed/Other: 63

Comparison with

Previous Surveys

Besides a slight shift

towards greater marketing

spend by field sales

companies, the results are

largely consistent with last

year’s results

Categorization of Companies by Dominant Sales Strategy

70% 70%64%

35%

70%

30% 30%36%

65%

30%

0%

20%

40%

60%

80%

100%

Overall Field Sales Inside Sales Internet Sales Mixed/Other

Sales Marketing

25

13

1

7

11

7

9

12

18

21

9

11

14

7

25

0

5

10

15

20

25

30

<3 mos. 3-5mos.

Approx6 mos.

7-9mos.

9-11mos.

Approx1 year

13-15mos.

15-17mos.

Approx18 mos.

19-21mos.

21-23mos.

2 - 2.5years

2.5-3years

≥3 years

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CAC Payback Period

CAC Payback Period(1) (Gross Margin Basis) (Excluding Companies <$2.5MM in Revenues)

(1) Implied CAC Payback Period: Defined as # of months of subscription gross profit required to recover the fully-loaded cost of acquiring a

customer; calculated by dividing self-reported CAC ratio by subscription gross margin

165 respondents

Respondents

reported an

implied median

CAC payback of

~18 months,

though there was

a wide

distribution of

responses.

Median ≈ 18 months

We used answers on CAC ratio and subscription gross margin questions to determine an

implied CAC payback period.

26

9%

14%

16% 16%

20%

23%

25%

28%

25%

0%

5%

10%

15%

20%

25%

30%

<$2.5MM $2.5MM-$5MM

$5MM-$7.5MM

$7.5MM-$10MM

$10MM-$15MM

$15MM-$25MM

$25MM-$40MM

$40MM-$75MM

>$75MM

% N

ew

AC

V f

rom

Up

sells &

Exp

an

sio

ns

2015 GAAP Revenue

What Percentage of New ACV is from Upsells &

Expansions to Existing Customers?

Respondents: Total: 285, <$2.5MM: 106, $2.5MM-$5MM: 46, $5MM-$7.5MM: 23, $7.5MM-$10MM: 20, $10MM-$15MM: 12, $15MM-$25MM: 27,

$25MM-$40MM: 15, $40MM-$75MM: 22, >$75MM: 14

Median

≈ 15%

Comparison with

Previous Surveys

Consistent with last year’s

overall median of 16%,

though companies with

revenue between $10MM-

$40MM are relying more

heavily on upsells and

expansions

The median

respondent gets

15% of new ACV

sales from upsells

and expansions;

larger companies

rely more heavily

on upsells and

expansions.

27

13

3

8

6

9

26

11

9

11

23

20

0 10 20 30

<(25%)

(15%)-(25%)

(5%)-(15%)

(1%)-(5%)

0-10%

10-20%

20-25%

25-30%

30-40%

40-50%

>50%

55

46

23

7

7

5

2

1

0 10 20 30 40 50 60

0-10%

10-25%

25-50%

50-75%

75-100%

100-150%

150-200%

>200%

Professional Services’ Impact on Go-to-Market (Excluding Companies <$2.5MM in Revenue)


Professional Services (as % of 1st year ACV)

Professional Services Margin

Median ≈ 16%

Professional

services play a

minor role for

most, with the

median company

booking P.S.

revenues on new

deals equivalent

to 16% of first

year subscription

contract value.

Median P.S.

margins are

approx. 22%.

Comparison with

Previous Surveys

Consistent with last

year’s results

Median ≈ 22%

28

18%

12%

10%

14%

0%

5%

10%

15%

20%

Enterprise SMB VSB Mixed

% o

f 1

st

Ye

ar

AC

V

Target Customer

Median

≈ 15%(1)

Professional Services (% of 1st Year ACV) as a Function

of Target Customer (Excluding Companies <$2.5MM in Revenue)

(1) Median lower than slide 27 due to slight differences in respondent pool

Respondents: Total: 141, Enterprise: 52, SMB: 31, VSB: 6, Mixed: 52

As expected,

companies which

are focused

mainly on

enterprise sales

have higher

levels of

professional

services.

Comparison with

Previous Surveys

Attach rates ticked down

for Enterprise and SMB

(2015 survey: Enterprise

26%, SMB 18%)

29

20

9

8

13

21

42

37

45

44

24

0 5 10 15 20 25 30 35 40 45 50

<50%

50-55%

55-60%

60-65%

65-70%

70-75%

75-80%

80-85%

85-90%

>90%

Subscription Gross Margin

“What is your gross profit margin on just subscription/SaaS revenues?”

263 respondents

Median

subscription

gross margins

are 78% (nearly

identical when

removing the

smallest

companies from

the group). Median

≈ 78%

Comparison with

Previous Surveys

Virtually unchanged from

the 2015, 2014 and 2013

results

30

Direct Sales Commissions by Sales Strategy

Respondents: Total: 221, Field Sales: 120, Inside Sales: 101

The survey

results did not

point to a

significant

difference in

direct

commissions

between

companies that

predominantly

use a field go-to

market strategy

versus inside

sales. However,

the median fully-

loaded

commission for

field sales (12%)

was higher than

that for inside

(10%).

Field

Dominated

Inside

Dominated

Median Direct Sales

Commission ≈ 9% ≈ 9%

Median Fully-Loaded

Sales Commission

≈ 12%

≈ 10%

11

14

19

43

11

9

13

10

17

13

29

18

6

8

0

5

10

15

20

25

30

35

40

45

50

0-3% 3-6% 6-8% 8-10% 10-12% 12-15% 15%+

Nu

mb

er

of

Re

sp

on

de

nts

Sales Commission Paid to Direct Rep (as % of first year ACV)

Field Sales Inside Sales

31

9% 8%

9% 9%

9% 8%

10%

11% 10%

11%12% 12%

0%

2%

4%

6%

8%

10%

12%

14%

<$1K $1K-$5K $5K-$25K $25K-$100K $100K-$250K >$250K

Me

dia

n S

ale

s C

om

mis

sio

n

Median Contract Size (ACV)

Direct Sales Commission Fully-Loaded Sales Commission

Sales Commissions as a Function of Median

Contract Size

Respondents: Total: 242 and 229, <$1K: 22 and 26, $1K-$5K: 30 and 25, $5K-$25K: 73 and 70, $25K-$100K: 76 and 69, $100K-$250K: 29 and

27, >$250K: 12 and 12, respectively

Comparison with

Previous Surveys

Last year’s survey also

saw a high degree of

consistency in direct

sales commissions

Median direct

sales

commission rates

did not vary

across contract

sizes, however

fully-loaded sales

commission rates

did increase

modestly with

larger contract

sizes.

Fully-Loaded

≈ 11%

Direct Sales

≈ 9%

32

Commissions for Renewals, Upsells and Multi-Year

Deals

(1) Among companies paying a commission

(2) Same rate (or higher) than new sales commissions

Respondents: Renewals: 244, Upsells: 254, Extra Years on Initial Contract: 235

Comparison with

Previous Surveys

The most significant

changes this year include:

1) Upsells: 59% paid full

commission rates on

upsells, vs. 45% in last

year’s group; comparable

to 58% in 2013 results.

2) This year just 11% paid

full commission on TCV

for multiple year contracts

vs. 20% in last year’s

group

Commissions on

renewals are

either non-existent

or very low, with

40% paying no

commission and a

median rate of 3%

among those

paying one.

Upsells command

a median rate of

7%, and more

than half of the

companies pay full

commissions on

upsells.

Upsells

7%Median Commission

Rate on Upsells

% of Respondents

Paying Full

Commission(2)

59%

Additional Commission for

Extra Years on Initial Contract

· No Additional

Commission33%

· Nominal Kicker 30%

· Full Commission 11%

% of Respondents Paying:

Renewals

40%

Median Commission

Rate on Renewals(1) 3%

% of Respondents

Not Paying Any

Commission

on Renewals

33

OPERATIONAL ASPECTS

34

Self Managed Servers

33%

Amazon Web Services (AWS)

51%

Microsoft Azure4%

Delivered by Salesforce

2%

Other Third Party10%

How is Your SaaS Application Delivered(1)?

(1) Reported “predominant” mode of delivery


Now 3 Years from Now 67% of participants

use third parties

predominantly (3/4

of which is AWS);

expectations for the

future show little

change as third

party application

delivery continues

to gain popularity.

Comparison with

Previous Surveys

The trend toward using

third party public cloud is

huge (mostly AWS) – self-

managed is down from

37% last year to 33% this

year and the percentage

planning to use AWS

three years from now

increased from 44% last

year to 64% this year.

Self Managed Servers 21%

Amazon Web Services (AWS)

64%

Microsoft Azure 7%

Delivered by Salesforce 2%

Other Third Party 6%

35

SaaS Application Delivery Method as a Function

of Size of Company

Respondents: Total: 287, <$2.5MM: 105, $2.5MM-$5MM: 46, $5MM-$10MM: 41, $10MM-$15MM: 12, $15MM-$25MM: 30, $25MM-$40MM: 16,

>$40MM: 37

When filtered by

company size,

smaller

respondents

reported more

frequent use of

third-party

providers as their

primary

application

delivery method,

while the largest

companies were

more likely to use

self-managed

servers.

Comparison with

Previous Surveys

Self-managed servers are

declining in usage among

all revenue groups, other

than $25MM-$40MM

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<$2.5MM $2.5MM-$5MM $5MM-$10MM $10MM-$15MM $15MM-$25MM $25MM-$40MM >$40MM

Amazon Web Servces (AWS) Self-Managed Servers Other Third Party Microsoft Azure Delivered By Salesforce

36

77% 78%77%

76%

73%

0%

20%

40%

60%

80%

100%

Self ManagedServers

Amazon WebServices (AWS)

Other Third Party Microsoft Azure Delivered bySalesforce

201

5 S

ub

scri

pti

on

Gro

ss M

arg

in

Subscription Gross Margin as a Function of SaaS

Application Delivery Method (Excluding Companies <$2.5MM in Revenue)

Respondents: Total: 214, Self Managed Servers: 74, Amazon Web Services (AWS): 104, Other Third Party: 21, Delivered by Salesforce: 5,

Microsoft Azure: 10

Median

≈ 77%

Median

subscription

gross margins

did not appear to

vary much when

filtered by SaaS

application

delivery method

(note that the

Salesforce data

is sparse).

37

4%

5% 5%

8%9%

6%

9%

5% 5% 5%

8%

6%

11%

7%

0%

2%

4%

6%

8%

10%

12%

<$2.5MM $2.5MM-$5MM

$5MM-$10MM

$10MM-$15MM

$15MM-$25MM

$25MM-$40MM

>$40MM

201

5 A

pp

lica

tio

n D

eli

ve

ry C

os

t a

s a

% o

f R

ev

en

ue

2015 GAAP Revenue

Self Managed % Third Party %

Operational Costs as a Function of SaaS Application

Delivery, Grouped by Size Tiers

This year’s

results appear

somewhat

counterintuitive

with larger

companies’

accounting

showing

operating costs

as a greater % of

revenue.

Self Managed

Median ≈ 5.4%

Respondents: Total: 269, <$2.5MM: 21 and 77, $2.5MM-$5MM: 11 and 33, $5MM-$10MM: 14 and 25, $10MM-$15MM: 3 and 9, $15MM-$40MM:

19 and 22, >$40MM: 21 and 14

Third-Party Median ≈ 5.0%

38

COST STRUCTURE

39

Cost Structure (Excluding Companies <$2.5MM in Revenue)

Respondents reporting: Gross Margin: 170, Sales and Marketing: 168, R&D: 166, G&A: 167, EBITDA Margin: 169, FCF Margin: 157, YoY

Growth: 204

Comparison with

Previous Surveys

Results are largely in-line

with previous results, but

EBITDA and FCF margin

were much more negative

than respondents

previously predicted (1%

EBITDA margin and 3%

FCF margin for 2015)

2015 Median

Gross Margin 75%

Operating Expense Margins:

Sales & Marketing 35%

R&D 26%

G&A 18%

EBITDA (15%)

FCF (13%)

YoY Growth Rate 35%

40

Median Cost Structure by Size (Excluding Companies <$2.5MM in Revenue)

Note: Numbers do not add due to the fact that medians were calculated for each metric separately and independently

Average Number of Respondents: Total: 171, $2.5MM-$5MM: 41, $5MM-$10MM: 40, $10MM-$15MM: 11, $15MM-25MM: 27, $25MM-$40MM: 16,

$40MM-$60MM: 15, $60MM-$100MM: 14, >$100MM: 7

Comparison with

Previous Surveys

Results are largely in-line

with last year’s survey. A

few anomalies from last

year have been eliminated

All Size of Company (2015 Rev)

Respondents $2.5-$5M $5-$10M $10-$15M $15-$25M $25-$40M $40-$60M $60-$100M >$100M

Total Gross Margin 75% 79% 77% 68% 73% 73% 68% 68% 68%

Subscription 79% 80% 84% 68% 76% 75% 78% 76% 81%

Professional Services 11% 13% 7% 25% 11% NM 11% 13% 8%

Operating Expense Margins:

Sales & Marketing 35% 26% 35% 38% 38% 38% 44% 46% 24%

R&D 26% 26% 30% 43% 30% 25% 23% 21% 18%

G&A 18% 21% 22% 22% 20% 14% 17% 13% 13%

EBITDA Margin (15%) (24%) (26%) (40%) (14%) (13%) (8%) (10%) 20%

YoY Growth Rate 35% 45% 46% 63% 25% 29% 34% 28% 28%

41

For Comparison: Historical Results of Selected

Public SaaS Companies

(1): YoY Revenue Growth compares against previous year’s revenue of the companies at the time

Note: Excludes stock-based compensation (SBC)

Median includes ALRM, AMBR, APPF, ATHN, BCOV, BNFT, BOX, BV, CNVO, COVS, CRM, CSOD, CTCT, CVT, DMAN, DWRE, ECOM,

EOPN, ET, FLTX, HUBS, LOGM, MB, MKTG, MKTO, MRIN, N, NEWR, NOW, OPWR, PAYC, PCTY, PFPT, QLYS, RNG, RNOW, RP, RPD

SFSF, SHOP, SPSC, SQI, TLEO, TWLO, TXTR, VEEV, VOCS, WDAY, WK, XTLY, YDLE and ZEN

~$25M median excludes ALRM, COVS, FLTX, PAYC, PFPT, QLYS, RNG, RP, RPD, TWLO, WK, YDLE and ZEN

~$50M median excludes BNFT, N, RP and WDAY

~$100M median excludes AMBR, APPF, CNVO, DMAN, DWRE, EOPN, NOW, VEEV, XLTY and ZEN

Total Revenue Run-Rate

~$25MM ~$50MM ~$100MM

Median Values

Gross Margin 60% 65% 69%

Sales & Marketing 47% 44% 44%

Research & Development 23% 20% 21%

G & A 17% 16% 18%

EBIT Margin (29%) (18%) (17%)

Adj. EBITDA Margin (25%) (7%) 1%

FCF Margin (25%) (15%) (9%)

YoY Revenue Growth Rate(1) 126% 54% 36%

42

In this year’s survey, we

sought to evaluate how

SaaS companies of scale

(at least $15MM of 2015

GAAP revenue) perform

as measured on an index

of {Growth + Profitability}.

This has become a hot

topic for management and

investors as attitudes

have shifted away from

“growth at any cost”. The

median growth plus profit

margin in the group was

20%.

Median

2015 GAAP Revenue Growth Rate +

2015 EBITDA Margin = 20%

≥

Measuring Performance Based on an Index of Growth

Plus Profits (Including Companies $15MM+ in Revenue)

2015 GAAP Revenue

$15MM to $25MM

$25MM to $40MM

$40MM to $60MM

$60MM to $75MM

$75MM to $100MM

Respondents: Total: 77, Yes: 20, No: 57

Note: Some respondents are not visible on the chart due to overlapping response data

≥

43

≥

Measuring Survey Participants Against “The Rule of 40%” (Including Companies $15MM+ in Revenue)

“The Rule of 40%”

Over

Under

~26% of

respondents with at

least $15MM in

2015 GAAP

revenue had a

revenue growth

rate + EBITDA

margin of 40% or

higher (“The Rule

of 40%”), a popular

benchmark for top

SaaS company

performance.

“The Rule of

40%” line


Note: Some respondents are not visible on the chart due to overlapping response data

Survey

Median

= 20%

2015 GAAP Revenue

$15MM to $25MM

$25MM to $40MM

$40MM to $60MM

$60MM to $75MM

$75MM to $100MM ≥

44

Comparison of “The Rule of 40%”: Leaders vs. Others (Including Companies $15MM+ in Revenue)

(1) See definitions described later in this presentation


The median results of

those respondents

meeting or exceeding


showed that they

tended to report lower

churn and lower CAC

ratios, were more

enterprise-focused

with larger contracts,

rely more heavily on

field sales, and more

often report a vertical

focus.


Over Under

(Medians) (Medians)

Scale / Growth / Profitability:

2015 Revenue $50MM $33MM

2015 Revenue Growth Rate 40% 27%

2015 Revenue per FTE $167K $149K

2015 EBITDA Margin 15% (15%)

SaaS Metrics:

Annual Gross Dollar Churn (1)

5.6% 10.6%

Net Dollar Retention Rate (1)

103% 102%

CAC Ratio for New Customers (1)

$1.06 $1.33

Business Focus / Go-To-Market:

Vertical Focus 35% 19%

End Customer 55% Enterprise 47% Enterprise

Median ACV per Customer $58K $35K

Inside Sales Dominated 10% 11%

Field Sales Dominated 60% 49%

Capital / Maturity:

Equity Capital Raised $46M $50M

Years in Operation 10 years 10 years

45

For Comparison: Growth and Profitability of Public

SaaS Companies

Note: Adj. EBITDA excludes stock based compensation

TTM data and Enterprise Value as of 9/26/16

2016E revenue based on consensus estimates as of 9/26/16

The median TTM

revenue growth rate +

adj. EBITDA margin for

publicly traded SaaS

companies was ~37%,

implying that just under

one half met or exceed

“The Rule of 40%”.

Median

TTM Growth Rate +

TTM Adj. EBITDA

Margin =37.4%

EV / 2016E Revenue Multiple

<1.0x 5.6x >15.0x

Enterprise Value

≤ $500MM

$10,000MM

$20,000MM

$30,000MM

$40,000MM

$50,000MM

46

CONTRACTING & PRICING

47

Median Annual Contract Value (ACV) of a Customer

252 respondents

Comparison with

Previous Surveys

These results are

somewhat above the

previous survey medians

of $21K, $21K, $20K in

2015, 2014 and 2013,

respectively

The median

initial annual

contract size

(subscription

component only)

for the group was

$25K per year.

Median

≈ $25K

48

Median / Typical Contract Terms for the Group

Respondents: Average Contract Length: 270, Average Billing Period: 268

Median ≈ 1.3 years Median ≈ 7 months

Average Contract Length Average Billing Period

Comparison with

Previous Surveys

Very comparable results

to 2015, with average

contract length shortening

from 1.5 years to 1.3 and

average billing period

increasing one month

over 2015 to seven

months

The median

average contract

length is 1.3

years; and the

median billing

term is seven

months in

advance.

49

Contract Length as a Function of Contract Size

Respondents: Total: 251, <$1K: 19, $1K-$5K: 32, $5K-$25K: 74, $25K-$100K: 82, $100K-$250K: 24, >$250K: 20

Comparison with

Previous Surveys

Companies in the

"elephant hunter" group

are less aggressively

booking super long-term

contracts. Respondents

with >$250K median ACV

book nearly 25% of their

contracts at 3 years or

longer (down from 35% in

the 2015 group)

The phenomenon

of longer contract

terms for larger

contracts is

pretty clear.

50

What is Your Primary Pricing Metric?

“Other” includes: Data usage, number of apps being tested, email volume, customer devices and amount of content

268 respondents

Comparison with

Previous Surveys

These results are largely

in-line with 2015, 2014

and 2013 results

51

RETENTION & CHURN

52

Annual Unit Churn(1) (Excluding Companies <$2.5MM in Revenue)

Median

≈ 10%

(1) Annual Unit Churn: Percentage churn of # of paid customers at year-end 2014 that were still customers at year-end 2015

177 respondents

Comparison with

Previous Surveys

This median has

remained relatively

consistent with 2015

findings

Reported median

annual unit churn

(by customer

count) is 10% for

the group.

53

Annual Unit Churn as a Function of Contract Length (Excluding Companies <$2.5MM in Revenue)

Respondents: Total: 172, Month to Month: 13, Less than 1 year : 13, 1 year: 31, 1 to 2 years: 70, 2 years: 36, 3+ years: 9

Not surprisingly,

companies with

longer contracts (2+

years) reported the

lowest annual unit

churn.

Median

≈ 10.0%

54

Annual Gross Dollar Churn(1) (Excluding Companies <$2.5MM in Revenue)

Median

≈ 8%

Comparison with

Previous Surveys

This result is comparable

to past survey results (7%

in 2015, 6% in 2014, 8%

in 2013)

Median annual

gross dollar

churn (without

the benefit of

upsells) is ~8%.

(1) Annual gross dollar churn is the % of dollar ARR under contract at the end of the prior year which was lost during the most recent year

(excludes the benefits of upsells and expansions).

165 respondents

55

Annual Gross Dollar Churn as a Function of

Contract Length (Excluding Companies <$2.5MM in Revenue)

Respondents: Total: 165, Month to Month: 10, Less than 1 year: 13,1 year: 30, 1 to 2 years: 69, 2 years: 35, 3+ years: 8

Comparison with

Previous Surveys

Companies with shorter

contracts (under 2 years)

saw increased dollar churn

compared to last year;

Contracts 2 years and

greater were relatively

consistent with prior survey

results

As with unit churn,

companies with

longer contracts

(2+ years) tend to

report lower

annual dollar

churn.

Median

≈ 8.3%

56

Annual Non-Renewal Rates(1) vs. Gross Dollar Churn

for Companies with Long-Term Contracts (Excluding Companies <$2.5MM in Revenue)

(1) Annual Non-Renewal Rate defined as the dollar ARR up for renewal in the year which does not renew; based on only contracts up for

renewal in a particular year

Respondents: Total: 112, 1 to 2 years: 69, 2 to 3 years: 35, 3+ years: 8

By definition, non-

renewal rates are

higher than gross

dollar churn rates;

however, it is

interesting to see

that the non-

renewal rates are

also higher for

shorter duration

contracts.

57

16.7%

11.7% 11.7%

5.0%

4.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0% 0-10% 10-25% 25-50% >50%

An

nu

al

Gro

ss D

ollar

Ch

urn

Rate

Professional Services (as % of 1st year ACV)

Annual Gross Dollar Churn as a Function of

Upfront Professional Services (Excluding Companies <$2.5MM in Revenue)

Respondents: Total: 165, 0%: 32, 0-10%: 47, 10-25%: 42, 25-50%: 22, >50%: 22

Respondents with

higher levels of

professional

services reported

lower churn rates.

What is unclear is

whether the reduced

churn is due to the

services or the fact

that such

companies tend to

also have larger,

long-term contracts.

Median

≈ 8.3%

58

Annual Gross Dollar Churn as a Function of Median

Contract Size (Excluding Companies <$2.5MM in Revenue)

Respondents: Total: 154, <$5K: 19, $5K-$15K: 26, $15K-$25K: 19, $25K-$100K: 56, $100K-$250K: 19, >$250K: 15

Comparison with

Previous Surveys

Largely consistent with last

year’s results; however,

churn trended up markedly

for the smaller sized

contract groups (<$5K

median ACV)

As contract sizes

increase, gross

dollar churn

consistently

trends

downwards

(presumably

related to longer

term contracts).

59

Annual Gross Dollar Churn as a Function of Primary

Distribution Mode (Excluding Companies <$2.5MM in Revenue)



Median

≈ 8.8%(1)

Comparison with

Previous Surveys

Gross dollar churn

among companies with

an Internet go-to-

market strategy saw a

meaningful increase,

up from 8% in 2015,

though this could be

due to a small sample

size for this group

Those

companies

employing

primarily field

sales had lower

gross dollar

churn rates than

those employing

primarily inside

sales or mixed

distribution.

60

Annual Net Dollar Retention from Existing Customers

100%

+ N

et

Rete

nti

on

(Upsells

gre

ate

r

than c

hurn

)

Net

Ch

urn

(Churn

gre

ate

r

than u

psells

)

(1) We define this as the “net dollar retention rate”

240 respondents

Comparison with

Previous Surveys

Largely consistent with

past two years’ results

(2015: 104% and 2014:

103%)

The median

annual net dollar

retention rate,

including churn

and the benefit of

upsells, is 102%.

The result does

not change

materially when

removing the

smallest

companies

(<$2.5MM in

revenue) from

the group .

“How much do you expect your ACV from existing customers to change, including the

effect of both churn and upsells?”(1)

Median

≈ 102%

61

CAPITAL REQUIREMENTS

62

Analysis of Companies by Equity Capital Raised (Excluding Companies <$2.5MM in Revenue)

170 respondents

Comparison with

Previous Surveys

The 2016 respondents

have less revenue traction

per dollars raised than

previous years’ groups

2015 Median

Amount No. of GAAP GAAP

Raised to Date Respondents Revenue Revenue Growth ARR ARR Growth

Less than $5MM 41 $5MM 46% $4MM 55%

$5MM to $15MM 30 $6MM 38% $5MM 50%

$15MM to $25MM 21 $7MM 36% $9MM 50%

$25MM to $50MM 30 $19MM 40% $20MM 47%

Greater than $50MM 48 $40MM 34% $39MM 37%

63

Median for Participants(1)

Years Investment

Threshold Required Required

$5MM ARR 3 $8MM

$10MM ARR 4 $16MM

$20MM ARR 6 $25MM

$40MM ARR 8 $43MM

Capital Efficiency

Time and equity investment required to reach:

(1) Those who have already reached target scale or greater

Respondents: $5MM ACV: 141, $10MM ACV: 97, $20MM ACV: 62, $40MM ACV: 35

64

% Using Median Debt Median Debt-to-MRR

2015 Revenue Range Debt(1) Level(2) Ratio(2)

Less than $5MM 27% $1MM 5.0x MRR

$5MM to $10MM 76% $3MM 3.5x MRR

$10MM to $15MM 82% $3MM 4.0x MRR

$15MM to $25MM 95% $5MM 3.0x MRR

$25MM to $40MM 93% $14MM 4.0x MRR

Greater than $40MM 91% $19MM 2.5x MRR

Use of Debt Capital Among Private SaaS Companies

(1) Of at least $1MM in debt

(2) Median among companies with at least $1MM of debt; includes debt outstanding plus availability under existing lines

Respondents: Total: 231, Less than $5MM: 113, $5MM to $10MM: 37, $10MM to $15MM: 11, $15MM to $25MM: 22, $25MM to $40MM: 14,

Greater than $40MM: 34

65

ACCOUNTING POLICIES

66

Subscription Revenue Recognition Policies (Excluding Companies <$2.5MM in Revenue)

“When do you typically begin recognizing subscription revenues on a new contract

with a new customer?”

Respondents: Whole Group: 135, 0-25%: 91, 25-75%: 29, >75%: 15

Approximately 53% of

the respondents

indicated that they

begin recognition very

soon (within a week or

two) after signing new

contracts. It’s

interesting to see that

many companies with

significant services

were still able to start

subscription revenue

recognition quickly.

Comparison with Previous

Surveys

A greater percentage of

companies are recognizing

subscription revenue “a few

months or more after

signing”; 25% this year vs.

17% last year

67

Professional Services Revenue Recognition Policies (Excluding Companies <$2.5MM in Revenue)

157 respondents

“What is the predominant mode for recognizing professional services revenues?”

The clear

majority of

respondents

offering

professional

services

indicated that

they recognize

that revenue as

the services are

provided.

68

Sales Commission Cost Recognition Policies (Excluding Companies <$2.5MM in Revenue)

168 respondents

“How do you recognize sales commission costs (deferred or recognized upfront)?”

We also inquired as

to the recognition of

sales commission

costs. We found

~3/4 of respondents

indicating that they

recognize

commission costs

up-front.

Comparison with

Previous Surveys

Slight shift toward upfront

recognition vs. 72% last

year

69

Subscription Revenue Recognition Professional Services Recognition Sales Comission Recognition

Within days of

signing a contract

Within a week or

two of signing

Within a month of

signing

A few months after

signing

A few quarters or

more after signing

As the service

is provided

Deferred over

contract term

Deferred over the

life of customer

Deferred

recognition

Recognized

upfront

BDO 33% 20% 13% 33% 0% 83% 8% 8% 20% 80%

Deloitte 50% 8% 25% 17% 0% 82% 18% 0% 42% 58%

E&Y 39% 6% 33% 11% 11% 73% 27% 0% 6% 94%

KPMG 75% 8% 17% 0% 0% 64% 27% 9% 33% 67%

Grant Thornton 60% 0% 0% 40% 0% 67% 33% 0% 33% 67%

McGladrey 30% 10% 10% 40% 10% 60% 20% 20% 30% 70%

PwC 58% 5% 26% 11% 0% 78% 22% 0% 17% 83%

Other 34% 15% 23% 22% 6% 69% 24% 6% 24% 76%

Total 42% 12% 22% 20% 4% 72% 23% 6% 23% 77%

Accounting Policies Across Selected Accounting Firms (Excluding Companies <$2.5MM in Revenue)

Respondents: Total: 154, BDO: 15, Deloitte: 12, E&Y: 18, KPMG: 12, Grant Thornton: 4, McGladrey: 10, PwC: 19, Other: 64

70

$110,400,000

Apptio(APTI)

Initial Public Offering

$103,500,000

Everbridge(EVBG)


2011-2016 YTD Software and SaaS IPOs

Rank Firm Deals Value ($MM)

1 Pacific Crest / KBCM 42 $6,307.9

2 Morgan Stanley 33 6,511.7

3 Goldman Sachs 29 5,122.3

4 J.P. Morgan 28 4,870.9

5 Credit Suisse 24 3,258.6

6 Cannaccord 22 3,942.6

7 Raymond James 22 3,321.7

8 William Blair & Co 20 2,527.0

9 Stifel Nicolaus Weisel 20 2,483.6

10 JMP Securities 19 3,328.6

11 Deutsche Bank 18 2,822.5

12 UBS 17 3,664.2

13 Barclays 14 2,127.6

14 Needham & Co 14 1,329.1

15 Bank of America 13 1,708.9

16 RBC Capital Markets 13 1,506.6

17 Oppenheimer & Co 9 815.1

18 Allen & Co 8 2,146.3

19 Wells Fargo 7 1,856.3

20 Jefferies 6 1,072.0

21 Citi 6 1,040.7

22 Piper Jaffray & Co 6 792.3

23 Cowen & Co 5 1,376.4

24 BMO 5 879.4

25 Lazard Capital Markets 4 446.2

Leadership in SaaS Transaction Execution

Corporate Finance Advisory

$100,100,000

MINDBODY(MB)


$150,535,000

Shopify(SHOP)


$201,250,000

Box(BOX)


$143,750,000

HubSpot(HUBS)


$114,999,993

Zendesk(ZEN)


$114,626,250

Paycom Softw are(PAYC)


$133,073,876

2U(TWOU)


$110,503,887

Amber Road(AMBR)


$300,035,000

Veeva Systems(VEEV)


$135,240,000

Cvent(CVT)


$732,550,000

Workday(WDAY)


has been acquired by has been acquired by

has been acquired by


has received an

investment from

has received an

investment from



has received an

investment from

has been acquired byhas been recapitalized by

$85,560,000

AppFolio(APPF)


$172,500,000

Tw ilio

(TWLO)


acquired by acquired by acquired by


71

Disclosures KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its

subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC (“KBCMI”), and KeyBank National Association (“KeyBank

N.A.”), are marketed. Pacific Crest Securities is a division of KBCMI.

This document has been prepared by Pacific Crest Securities, a division of KeyBanc Capital Markets Inc., herein known as “PCS”.

The material contained herein is based on data from sources considered to be reliable, however PCS does not guarantee or

warrant the accuracy or completeness of the information. This document is for informational purposes only. Neither the information

nor any opinion expressed constitutes an offer, or the solicitation of an offer, to buy or sell any security. This document may contain

forward-looking statements, which involve risk and uncertainty. Actual results may differ significantly from the forward-looking

statements. This report is not intended to provide personal investment advice and it does not take into account the specific

investment objectives, financial situation and the specific needs of any person or entity.

Individuals associated with PCS or PCS itself may have a position (long or short) in the securities covered in this document and

may make purchases and/or sales of those securities in the open market or otherwise without notice.

The firm does not, and is unable to, make promises about research coverage. Research will be initiated, updated and ceased solely

at the discretion of PCS Research Management. This communication is intended solely for the use by the recipient. The recipient

agrees not to forward or copy the information to any other person outside their organization without the express written consent of

PCS.

KEYBANC CAPITAL MARKETS INC. IS NOT A BANK OR TRUST COMPANY AND IT DOES NOT ACCEPT DEPOSITS. THE

OBLIGATIONS OF KEYBANC CAPITAL MARKETS INC. ARE NOT OBLIGATIONS OF KEYBANK N.A. OR ANY OF ITS

AFFILIATE BANKS, AND NONE OF KEYCORP’S BANKS ARE RESPONSIBLE FOR, OR GUARANTEE, THE SECURITIES OR

SECURITIES-RELATED PRODUCTS OR SERVICES SOLD, OFFERED OR RECOMMENDED BY KEYBANC CAPITAL

MARKETS INC. OR ITS EMPLOYEES. SECURITIES AND OTHER INVESTMENT PRODUCTS SOLD, OFFERED OR

RECOMMENDED BY KEYBANC CAPITAL MARKETS INC., IF ANY, ARE NOT BANK DEPOSITS OR OBLIGATIONS AND ARE

NOT INSURED BY THE FDIC.

If you have questions or comments, please contact David Spitz, Managing Director:

[email protected]

2016 Pacific Crest Securities Private SaaS …...2 Pacific Crest 2016 Private SaaS Company Survey...

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